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GOODS AND SERVICES TAX: NEXT STEPS



Revenue Secretary's presentation on next steps required on Goods Services Tax Revenue Secy's presentation on next steps required on Goods and Service Tax (GST)



GOODS AND SERVICES TAX:  NEXT STEPS

THE ROADMAP TO GST

• Establishment of Legal Framework
• Preparation of IT infrastructure
• Change Management:
• Training of Officials and Staff
• Outreach and Consultation with trade and industry
Target date of GST Roll Out: 1st April 2017 

ESTABLISHMENT OF LEGAL FRAMEWORK

1. Passage of the Constitution Amendment Bill from Parliament: First week of August 2016
2. Ratification by 50% States
3. Presidential Assent of Constitution Amendment and notification in official Gazette
4. Cabinet Approval for Formation of GST Council
5. Recommendation of Model GST laws by GST Council
6. Cabinet Approval for the CGST and IGST laws by Centre and for SGST laws by ALL states
7. Passage of CGST and IGST laws in the Centre and passage of SGST laws in ALL states:
     Winter Session 2016
8. Notification of GST Rules

PREPARATION OF IT INFRASTRUCTURE

Goods and Services Tax Network (GSTN): Not-for-profit, nonGovernment
Company set up by Centre and States to provide
shared IT infrastructure and services to Central and State
Governments, tax payers and other stakeholders.

Frontend Processes: Common modules for registration, returns and
payments being developed by GSTN.

Backend Processes: Modules for backend processes of tax authorities such
as processing registration/returns, assessments, audit, appeals, etc.

• Development of GST Frontend and Backend for 17 States by GSTN:
         End December 2016

CBEC’s Backend systems: End November 2016

Backend systems of 14 States: End November 2016

Backend systems of Pr. CCA, Banks, RBI & State accounting
authorities: End November 2016

Testing and integration of GST Frontend and backend of all
stakeholders: Jan – March 2017 

CHANGE MANAGEMENT

• 60,000 officials of Centre and State Governments to be trained on GST
laws and IT framework: till lowest level assessing officer in States and
Centre

• Training on GST Laws:

• Phase I: Source Trainer’s workshop (25 officers) – Completed.

• Phase II: Master Trainer Sessions (350 officers) – Till Mid August 2016

• Phase III: Trainer Sessions (1000 officers)– Till October 2016

• Phase IV: Last leg training sessions (60,000 officers): End December 2016

• Training on GST IT systems: To be held in similar pyramidal structure by
GSTN: December 2016 – March 2017

• Outreach and sensitisation for trade and industry:

• Stakeholder consultation and outreach workshops to be organised
across the country – have already started with Hyderabad and
Jaipur

• To be completed by March 2017

REGISTRATION

ØExisting dealers : No fresh registration needed for
existing dealers. Existing VAT/Service tax/Central Excise
dealer data to be migrated to GST system.

ØNew dealers : Single application to be filed online for
registration under Goods & Services Tax (GST).

ØThe registration number will be PAN based and will
serve the purpose for Centre and State.

ØEach dealer to be given unique id GSTIN

ØRegistration to be granted within 3 days.

ØPost registration verification in risk based cases only.

RETURNS

• Common return would serve the purpose of both
Centre and State Government.

• Most average tax payers would be using only four
forms for filing their returns. These are return for
supplies, return for purchases, monthly returns and
annual return.

• Small taxpayers: Small taxpayers who have opted
composition scheme shall have to file return on
quarterly basis.

• Filing of returns shall be completely online.

• All taxes can also be paid onine.

MAJOR CHALLENGES

• Calculation of Revenue Base of Centre and States,
along with compensation requirements of Centre

• GST Rates structure

• List of Exemptions

• Forming of consensus on Model GST Bill

• Threshold limits

• Compounding limits

• Cross Empowerment to mitigate ill-effects of Dual Control

***** 

Signing of Bilateral Advance Pricing Agreement by CBDT 

The Central Board of Direct Taxes (CBDT) entered into a Bilateral Advance Pricing Agreement (APA) on 2nd August, 2016 with the Indian subsidiary of a Japanese trading company. This is the first Bilateral Advance Pricing agreement with a Japanese company having a “Rollback” provision in it. Overall, it is fourth bilateral APA signed by CBDT. Signing of this bilateral APA is an important step towards ascertaining certainty in transfer pricing matters of multinational company cases and dispute resolution. 

The APA Scheme was introduced in the Income-tax Act in 2012 and the “Rollback” provisions were introduced in 2014. The scheme endeavours to provide certainty to taxpayers in the domain of transfer pricing by specifying the methods of pricing and setting the prices of international transactions in advance.

The progress of the APA Scheme strengthens the Government’s mission of fostering a non-adversarial tax regime. The CBDT expects more APAs to be concluded and signed in the near future. 

****
Exchange Rate of Foreign Currency Relating to Imported and Export Goods Notified 

In exercise of the powers conferred by section 14 of the Customs Act, 1962 (52 of 1962), and in supersession of the notification of the Central Board of Excise and Customs No.105/2016-CUSTOMS (N.T.), dated 21st  July, 2016, except as respects things done or omitted to be done before such supersession, the Central Board of Excise and  Customs hereby determines that the rate of exchange of conversion of each of the foreign currencies specified in column (2) of each of Schedule I and  Schedule II annexed hereto, into Indian currency or vice versa, shall, with effect from 05th August, 2016, be the rate mentioned against it in the corresponding entry in column (3) thereof, for the purpose of the said section, relating to imported and export goods.

SCHEDULE-I                            
Sl.No. Foreign Currency  Rate of exchange of one unit of foreign currency equivalent to                          Indian rupees
-----------------------------------------------------------------------------------
(1)    (2)                                 (3)
----------------------------------------------------------------------------------
                          (a)                 (b) 
---------------------------------------------------------------------------------- 
(For Imported Goods)   (For Export Goods)
---------------------------------------------------------------------------------- 
1.Australian Dollar 51.80 50.05
2.Bahrain Dinar 183.50 171.25
3.Canadian Dollar            52.00 50.40
4.Danish Kroner 10.20 9.85
5.EURO 75.85 73.30
6.Hong Kong Dollar 8.75        8.50
7.Kuwait Dinar 229.30 214.55
8.New Zealand Dollar 48.95 47.05
9.Norwegian Kroner 8.05        7.75
10.Pound Sterling 90.75 87.85
11.Singapore Dollar 50.65 49.10
12.South African Rand 5.00        4.65
13.Saudi Arabian Riyal 18.45 17.25
14.Swedish Kroner 7.95          7.70
15.Swiss Franc 70.00 67.55
16.UAE Dirham 18.80 17.65
17.US Dollar 67.75 66.05
18.Chinese Yuan 10.25 9.90
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SCHEDULE-II
------------------------------------------------------------------------------
Sl.No.Foreign Currency Rate of exchange of 100 units of 
foreign currency equivalent to Indian rupees
------------------------------------------------------------------------------
(1)  (2) (3)
-----------------------------------------------------------------------------
(a) (b)
-------------------------------------------------------------------------------
(For Imported Goods)   (For Export Goods)
-----------------------------------------------------------------------------
1.Japanese Yen 67.25 65.00
2.Kenya Shilling 68.25 63.80
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